An Important Component of _____ Is That It Might Pay

question 111

Multiple Choice

An important component of _____ is that it might pay governments to intervene in an industry if it helps domestic firms overcome the barriers to entry created by foreign firms that have already reaped first-mover advantages.

• A) tactical trade policy
• B) strategic trade policy
• C) administrative trade policy
• D) comparative trade policy
• E) infant industry policy

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Definitions:

TVC

Total Variable Cost, which refers to the sum of all costs that vary with the level of output or production, such as raw materials and direct labor costs.

TC

An abbreviation for Total Cost, it quantifies the overall expense incurred in the production of goods or services, encompassing both fixed and variable costs.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output expands, often due to complexities and inefficiencies at larger scales.

Long-Run Average Total Cost

The cost per unit of output incurred when all factors of production, including capital, are variable, indicating the lowest possible cost of production for each level of output when the scale of operation is changed.